What did the Jedi know?
The Jedi were groping in the dark towards the end of their existence - quite literally - and did not know who to suspect.
They knew that there were two Sith lords active in the galaxy, and that the Sith had a hand in the Clone Wars. They knew of the Rule of Two (though exactly how they knew of it is unclear in the current canon), and they knew that the Sith had returned by the end of Episode I.
MACE WINDU : There is no doubt. The mysterious warrior was a Sith.
YODA : Always two there are....no more...no less. A master and an apprentice.
In Episode II, the Jedi gained more information about their enemies, and from them. From the novelisation:
"The truth," said a confident Dooku. "What if I told you that the Republic was now under the control of the Dark Lords of the Sith?"
"No! That's not possible." His mind whirled, needing a denial. He alone among the Jedi had battled a Sith Lord, and that contest had cost his beloved master Qui-Gon his life. "The Jedi would be aware of it."
"The dark side of the Force has clouded their vision, my friend," Dooku calmly explained. "Hundreds of Senators are now under the influence of a Sith Lord called Darth Sidious."
Of course, this information came from a fallen former-Jedi, one who was very soon after shown to be following the Dark Side, but it was also known by other associates of the separatists - including those who were captured and tried after the Battle of Naboo - so there was verification.
By Episode III, the Jedi knew that Dooku was the Sith Lord Darth Tyranus - we saw this confirmed in the Clone Wars series - and were using the name Sidious for their unknown second Sith opponent. They still did not know who Sidious was, however. The Epsiode III novelisation gives us this sequence:
"We have circumstantial evidence that traces Sidious to Palpatine's inner circle."
Suddenly Obi-Wan had difficulty breathing. "Are you certain?"
Mace shook his head. "Nothing is certain. But this raid - the capture of Palpatine had a be an inside job. And the timing...we were closing in on him, Master Kenobi! The information you and Anakin discovered
...
..."The trail led to the sub-basement of Five Hundred Republica."
Five Hundred Republica was the most exclusive address on the planet. Its inhabitants included only the incredibly wealthy or the incredibly powerful, from Raith Sienar [...] to Palpatine himself.
...
"We have to face the possibility - the probability - that what Dooku told you on Geonosis was actually true. That the Senate is under the influence - under the control - of Darth Sidious. That it has been for years."
...
"The only reason Palpatine's not a suspect is because he already rules the galaxy."
So, the Jedi as a group knew that:
There were two Sith Lords
The aged, extremely skilled Count Dooku was one of them
The second was named Sidious
They still didn't know if Sidious was the Master or the Apprentice.
- Sidious is likely protected at the highest levels of Republican government.
What did the Jedi think?
They thought that Palpatine was under the control of Sidious. They acted on this by keeping information from him, and by attempting to spy on him by using Anakin's friendship with Palpatine. Tensions were high between the Council and the Chancellor, thanks to their suspicions about his inner circle, fears that he would not give up power when the Clone Wars ended, and his attempts to force Anakin onto the Jedi Council.
So yes, Yoda and the rest of the Jedi suspected that Palpatine was, at the very least, a dangerous, cynical, and power-hungry politician, and considered him at best a necessary evil. They thought him a potential threat, feared he may seek to become a dictator. Whether that reaches the level of considering him "evil" is a matter of opinion; they definitely thought he was dangerous.
